Piper Sandler has adjusted its outlook on TriplePoint Venture Growth (NYSE: NYSE:TPVG), lowering the price target to $8.00 from the previous $9.50, while sustaining a Neutral rating on the stock.
The revision follows TriplePoint's recent performance, which included a reported earnings miss influenced by reduced interest income and elevated operating expenses. This marks the fifth consecutive quarter where the company's portfolio shrank as prepayments surpassed new originations.
The firm, on Thursday, also noted that TriplePoint has reduced its quarterly dividend to $0.30 from $0.40. The net investment income for the second quarter of 2024 was reported at $0.33.
Despite the current challenges, Piper Sandler acknowledged that TriplePoint has significantly improved its liquidity and leverage position. However, expectations for growth remain subdued compared to historical levels.
Piper Sandler has revised its earnings estimates for TriplePoint for the years 2024 and 2025 to $1.42 and $1.49 per share, respectively, down from the previous estimates of $1.66 and $1.80.
The new price target represents approximately 85% of the firm's second-quarter 2025 net asset value estimate, a decrease from the prior 90%.
The investment firm anticipates that TriplePoint's shares will trade lower on Thursday due to the combination of lower net investment income, the dividend reduction, and diminished forward earnings potential.
InvestingPro Insights
In light of Piper Sandler's recent outlook adjustment on TriplePoint Venture Growth (NYSE:TPVG), current InvestingPro data sheds additional light on the company's financial health and market performance. With a market capitalization of $304.66 million and a negative P/E ratio of -7.39, TriplePoint's recent challenges are reflected in its valuation. Notably, the company's revenue over the last twelve months as of Q1 2024 stands at $131.92 million, marking a modest growth of 5.86%. However, the quarterly revenue growth has decreased by 11.26%, indicating potential headwinds in short-term earnings.
InvestingPro Tips highlight a significant dividend yield of 19.88% for TriplePoint, which is a key consideration for income-focused investors, especially as the company has maintained dividend payments for 11 consecutive years. Despite this, the company is trading near its 52-week low and has not been profitable over the last twelve months. Furthermore, its short-term obligations exceed its liquid assets, which may raise concerns about its liquidity position. For investors considering this stock, it's important to weigh these factors alongside the dividend yield and historical dividend consistency.
For those seeking a more comprehensive analysis, InvestingPro offers additional tips on TriplePoint, which could provide deeper insights into the company's financials and future prospects.
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